The Rusty Nail, December 2012
“You betcha. Blow out the candles, OK?” Rochelle took off her T-shirt and watched him turn the room into total darkness. Russ crawled into bed and melted into her warm embrace. She kissed him, said goodnight and turned away. He pressed his body against hers, cuddling like spoons in a drawer, his hand cupping her breast. “Had another thought about the briefcase,” he said. “How Tibor figured out the combinations to the locks.” “And?” “Only two people know the numbers. Me and Fran.” “Your ex? You think she's involved in this?” “It's possible. She used to work at Hornblower but quit after Todd was born. She might have some connection with Tibor.” Rochelle rolled and turned back to face him. “Why would she do that?” “Certainly not out of the goodness of her heart. If anything, payback. Trying to manipulate me into doing something illegal.” “What the hell did you do to her?” “Long story, something for later. Let's just say I wasn't a faithful husband.” “Sorry, didn't mean to pry. It's none of my business anyway.” “No problem. In a way, it's good that we understand her motivation.” She moved back into her previous position and he pulled her close. “At least I don't have a problem with my ex,” she said. “He was out of the picture years ago.” “I can't imagine him letting you get away.” “It was the other way around. He was an OK guy but he was smothering me. I couldn't be myself, couldn't have the career I wanted. So I just let him go.” Russ fondled her breast. “Truth in advertising, right?” “Go to sleep, Russ.”
She touched her glass against his. “Don't see how it could be any better.” They ate silently and the conversation soon turned to other matters. “Any thoughts on the report from China?” he said. “Kind of disappointing. He took a long time to come up with almost nothing.” “But that in itself says a lot. The guy tried to verify all those outlandish claims but kept running into walls. Glowing testimonials and glittering generalities but no scientific evidence. It all points to a scam. That's the way I see it.” “Agreed,” she said. “Your logic is solid and I'm ready for the next step. Did you know there are 3.5 billion— that's with a B—shares outstanding? I've found millions being held by hedge funds, small cap and emerging market funds and some investment banks. Next week I'll borrow five million from various places but none from Hornblower. Don't want to tip our hand.” “You have the cash collateral for five million shares? At five cents a share…let's see…that's around 250 thousand, not to mention the interest markup.” “I can handle it. My piggy bank is pretty fat right now.” “All right, but just be careful.” She smiled and sipped her wine. “Just watch me work my magic.” Over the next several weeks, KAOS trading volume rose slowly and the price gradually increased by pennies at a time. On the last day of April, the market for KAOS practically exploded. Hornblower issued a press release citing a medical breakthrough by a group of scientists based in Dandong, experiments that had been conducted over a two year period; they found an antibody which promised to destroy cancer cells. The announcement was cautiously worded, noting that more extensive tests had to be conducted before any type of derivative drug could be safely used by the medical profession. Later that same evening, Russ received an e-mail from Beryl's China contact; “Don't believe everything you read” was the brief text. Trading volume increased sharply and the stock jumped to $1.25. During the next several weeks, volume and price continued to rise. Russ became nervous, watching the market activity, but Rochelle remained calm and focused. More than once he thought, I hope she knows what she's doing. More optimistic information about KAOS emerged from China prompting several financial analysts to issue a “Buy” rating on the stock. KAOS boasted of a new variety of damiana leaves whose aphrodisiac powers were supposedly phenomenal. Volume rose to three million shares daily and the price climbed to $4.00. Unbeknownst to Russ, Rochelle began selling her borrowed shares into the rally at $3.00 per share and then again at $4.00. At the end of May, she unloaded the last of her holdings, a massive one million shares at $5.00 a pop. Each night, in the privacy of her own apartment, she would call someone on her cell phone and give brief instructions to the person at the other end about selling KAOS shares the next day.
During that weekend, Russ and Rochelle agreed to not say a word about Kaoshiung Enterprises in the W & W office or any other place where their conversation could be overheard. Nevertheless, each one watched their respective computer screens, stock market TV programs and financial newspapers such as The Wall Street Journal and Investor's Business Daily for any mention of the stock. Almost two months after the briefcase exchange incident, Kaoshiung Enterprises was listed on the OTC Bulletin Board, its symbol KAOS, and began trading at a nickel per share. Daily volume was low but steady as announcements were made by Hornblower, probably Tibor's doing, and self-appointed gurus on market blogs. A short time later, Beryl's contact sent a report that was anxiously read by both, however they postponed any discussion until that evening in Russ's apartment. He made New England clam chowder accompanied by a bottle of Sancerre. After Rochelle carefully sipped her first taste of chowder she said, “This is absolutely delicious. Even better than sex. You may be a keeper, Mr. Silverthorne.” Russ laughed and raised his glass. “Then I may have to work harder on my bedroom techniques.” 44